Expansion of the Southern Gas Corridor remains on hold as European buyers have not committed sufficient long-term offtake or financing. The delay limits the prospect of materially higher Caspian gas flows into Southeast Europe. SOCAR said no final investment decision has been taken.
Capacity increase options for corridor infrastructure
One expansion scenario would raise TAP capacity to 23.3 bcm/year from 10.5 bcm/year. Under the same scenario, TANAP would increase to 31.7 bcm/year from 16.2 bcm/year. The South Caucasus Pipeline would be expanded to 33.6 bcm/year from 24 bcm/year.
Azerbaijan estimates construction would take roughly five years after commercial commitments are secured. The constraint is increasingly commercial rather than technical, according to the conditions described for the project.
Balkan demand and the role of long-term contracting
Southeast European markets including Greece, Bulgaria, Romania, Serbia, Hungary, Croatia and North Macedonia are actively seeking diversified gas. Pipeline expansion requires long-term contracts capable of supporting billions of euros in investment.
The contracting requirement creates tension with EU policy. Buyers want additional non-Russian gas but may be reluctant to sign very long contracts while European policy simultaneously targets lower fossil-fuel consumption.
Diversification depends on demand guarantees
Without those commitments, Azerbaijan has little incentive to invest in significantly larger export infrastructure. The stalemate matters for Southeast Europe because the region has already built many interconnectors needed to receive additional Caspian gas.
Physical access is improving faster than upstream supply. The next stage of diversification therefore depends less on constructing Balkan pipelines and more on whether European buyers are willing to guarantee demand for the gas that would fill them.
